Why is investing in technology a better option than investing in labor or capital as a means to sustained growth?
What will be an ideal response?
The main reason why investing in technology is a better option than investing in labor or capital as a means to sustained growth is that investing in labor and capital is subject to diminishing marginal product. This implies that the additional output generated by investing in an extra unit of capital or labor diminishes as we have more of capital and labor. Hence, growth cannot be sustained by investing only on labor or capital. On the other hand, investment in technology builds on previous stocks of technology. Hence, technological growth is exponential in nature.
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The long-run aggregate supply curve is vertical, and the short-run aggregate supply curve is upward sloping
a. True b. False Indicate whether the statement is true or false
Unions contribute to
a. frictional unemployment but not the natural rate of unemployment. b. the natural rate of unemployment but not frictional unemployment. c. both frictional unemployment and the natural rate of unemployment. d. neither frictional unemployment nor the natural rate of unemployment.
Which of the following will not cause a shift in the demand for resource X?
A. A decline in the price of resource X. B. An increase in the price of the product resource X is producing. C. A decrease in the price of substitute resource Y. D. An increase in the productivity of resource X.
If a firm cannot earn profits in the short run, it will shut down
Indicate whether the statement is true or false